Traders Smash $1300 Gold Strong Point Without A Second Thought

Gold recorded its highest daily gains since last September after months of subdued trading. A flurry of buying games following the Fed’s announcement to hold off raising interest rates. Traders did not think twice about smashing through the $1300 an ounce threshold and drove prices from $1277.50 to $1320.30 in a day.

Federal Reserve Chairwoman, Janet Yellen emerged from a two-day meeting in Washington to address the press and shortly after announcing the Federal Open Market Committee’s (FOMC) plans to withhold increasing interest rates in early 2015, traders pounced and gold like it was going out of fashion.

There were few surprises in the FOMC address, and the only change in this month’s meeting was a slightly more optimistic outlook on the recovering global economy. Although policy makers decided to stick with the same line they have done for the last six months this time traders reacting with wholesale purchases. For the past six months they have approached with caution.

Gold purchases double

On Thursday gold purchases doubled the daily average over the past few months and had leapt as high as $1322 an ounce by midday before settling on $1320.30 by close of play. It appears as though traders are hoping to make quick gains in the likelihood gold prices will continue to climb over the coming months.

Yellen advised interest rates will stay low for some considerable time in order to allow the US and the global economy to stabilise before raising rates. As a result the US dollar plunged against a basket of currencies.

With traders representing investment banks buying huge quantities of gold, it leaves consumers having to pay more for their investment, and over the next year when the FOMC decide they will lower interest rates gold price will come back down.

The big question is when will the debt ceiling collapse? Analysts predict it will be before the end of the decade and could be as early as next year. With gold prices likely to be pushed closer to the $1400 an ounce price point, it may be worth the risk investing in gold before prices soar out of sight.

Financial collapse

The US debt clock records that the US is $17.5 trillion in debt, more than $55,100 per person. Although the fiscal cliff threatened to bring the house down last autumn, Congress decided to delay any action until March 15, 2015.

In the meantime, the US is clocking up more than $3.5bn of debt every day and more than $15 trillion of electronic money is floating around in the system following large quantitative easing campaigns from Central Banks of Japan, the US, and the UK. Earlier this month the ECB also took unprecedented steps to move interest rates into the negative.

The policies employed by central banks are irresponsible and are leading the world towards another debt crisis and a recession that will make the last six years of sluggishness appear like an easy ride. If investors do not buy gold they may be left with no financial security in five years from now. To make sure you are not left bankrupt head over to coininvest.com and secure your financial future.